Making Tax Digital
What is Making Tax Digital (MTD) for Income Tax
MTD for Income Tax is a new way for self-employed business owners and landlords to keep their records and report their earnings to HMRC.
From April 2026 onwards, most Self-employed workers and unincorporated Landlords with qualifying income above a certain threshold will have to:
- keep records of their income and expenses in a digital format
- send quarterly updates of their income and expenses to HMRC for each qualifying income stream
- finalise their qualifying income annually by submitting a final declaration
The scheme aims to make tax filing easier as well as improve accuracy, with the final tax declaration submitted at the end of the accounting period. This will replace the current Self-Assessment tax return.
Who does MTD for Income Tax affect and when?
You will need to follow MTD for Income Tax requirements if you are registered for Self-Assessment and receive income from Self-employment or property, or both.
If you are Self employed
You’ll need to record all your sales and business expenses digitally and send four summaries to HMRC each year.
If you are a landlord
You’ll need to record all your rental income and allowable property expenses digitally and send four summaries to HMRC each year.
If you’re a sole trader and a landlord
Your mandatory start date is determined by the combined total of your income from both your self employed activity and your rental income.
How can we help
We understand that change can be difficult and moving to digital software may take some time to get used to. Sidekick is here to support you not only with software but with submissions and final declaration help if you need it.
There are many positives to the new MTD for Income Tax and if you work with us it can be very simple
Know your Tax bill:
See your estimated tax bill as you go, so you can save ahead and avoid any last-minute stress.
More accuracy:
Using our software will allow transactions flow in automatically — no manual data entry. Instantly capture receipts, fix errors, and store documents online.
Invoice faster:
Send invoices from the software you are now using. No need for separate invoicing systems or word templates!
Real-Time information:
Know what you’ve earned, what you’re owed, and where to save — so you can have more control.
This change is being rolled out in phases, based on your total annual income (from self-employment and/or property rental)
While the changes are phased, we recommend starting now to have better digital habits.
The totals income refers to qualifying income. This is a total of your self-employed income and rental income – it is INCOME and not profits. HMRC will use the figures from the previous tax year to confirm when you are eligible for MTD.
APRIL 2026
Qualifying income over £50,000
APRIL 2027
Qualifying income over £30,000
APRIL 2028
Qualifying income over £20,000
HMRC-recognised Making Tax Digital (MTD) software takes the hassle out of Income Tax compliance.
Built for small businesses, it will help you meet MTD regulations with ease while cutting down on admin time. This is exactly what we can offer – and More!
We provide cloud-based software which is approved as Income Tax Self-Assessment compatible for MTD.
For a low fixed monthly fee, we will provide a FreeAgent licence giving you the ability to file returns digitally with the software you need.
Should you need it, we can also offer support with quarterly returns, and final declarations and assessments with our monthly services. Should you wish to manage your own affairs then we can just provide the software, and you can manage the rest!
Software Only
- Raise Invoices
- Log Expenses
- Complete Bookkeeping
- Link Bank Feed
- Mobile app
- File submissions directly with HMRC
Landlords
- Raise Invoices
- Log Expenses
- Complete Bookkeeping
- Link Bank Feed
- Specifically designed for Landlords
- Mobile app
- File submissions directly with HMRC
- Track each property income and costs
Self-Employed
- Raise Invoices
- Log Expenses
- Complete Bookkeeping
- Submit Payroll and RTI Returns
- Submit MTD VAT returns
- Submit MTD ITSA returns
- Link Bank Feed
- Produce Self-Assessment
MTD for Income Tax FAQS
Yes, for Self-employed workers and landlords who reach the turnover threshold. You will submit four quarterly updates and one final declaration instead of one annual return, using your HMRC-recognised software. It’s the same information, just spread out across the year. The first year you may also need to complete a self-assessment as you will not have filed 4 x returns.
No unfortunately this will not meet MTD compliance. HMRC expect all records to be submitted digitally via HMRC recognised software.
MTD for VAT is already mandatory for all VAT registered businesses (including Limited companies) and VAT relies on quarterly submissions and payments. MTD for income tax is being phased in from April 2026 and will eventually mean all self employed worker and landlords will be required to complete quarterly income and expense submission along with a final declaration, instead of a self assessment tax return each year.
